The correct identification of immune-modulatory activity of polysaccharides is often hampered by immune-stimulatory contaminants, with pyrogens such as lipopolysaccharide (LPS) as a very potent example. In order to avoid false positive immuno-stimulatory properties to be attributed to polysaccharides, accurate quantification and inactivation of LPS in test samples is crucial. To quantify LPS in polysaccharide preparations of different origin and structure we used two different limulus amoebocyte lysate test kits in two different laboratories. We observed larger variation in detection of LPS contamination between kits than between labs. LPS quantification proved unreliable for some polysaccharide preparations as spike controls resulted in spike recoveries outside the acceptable range. We designed a cellular in vitro assay as alternative method to detect the presence of functional LPS. This HEK-Blue hTLR4 cell culture provides a reliable assay, when combined with a cell viability test, for determining functional LPS in polysaccharide preparations. Finally, to inactivate LPS in polysaccharide preparations, we setup an alkaline-ethanol-based treatment. With this assay we observed that our treatment (5 h incubation in 0.1 M NaOH) at 56 °C efficiently inactivated LPS in all polysaccharide preparations below immune-stimulatory levels. At this elevated temperature, however, we also observed minimal to severe degradation of polysaccharide preparations as determined with SEC-RI. Taken together, we describe methods and precautions to reliably detect and inactivate LPS in polysaccharide preparations to allow reliable in vitro investigations towards immune-modulatory potential of polysaccharide preparations.